AGM Minutes 2013
Minutes of the fifty-sixth Annual General Meeting of CONSUMERS' ASSOCIATION Held on Tuesday 19 November 2013 at The King's Fund, 11-13 Cavendish Square, London, W1G PAN starting at 12.00 noon PRESENT: Professor Patrick Barwise (Chairman), Jenny Oscroft (Deputy Chairman), Paul Preston (Deputy Chairman), Peter Vicary-Smith (Chief Executive), Andrew Reading (Company Secretary) and some 102 Ordinary Members of the Association. 1/56 MINUTES OF THE 55th ANNUAL GENERAL MEETING OF CONSUMERS' ASSOCIATION HELD ON 7 NOVEMBER 2012 The Chairman proposed: THAT the Minutes of the Annual General Meeting held on 7 November 2012 be APPROVED. The Resolution was duly seconded and CARRIED, 2066 votes in favour, 7 against and 42 abstentions. 2/56 MINUTES OF THE GENERAL MEETING HELD ON 26 JULY 2012 The Chairman proposed: THAT the Minutes of the General Meeting held on 26 July 2012 be APPROVED. The Resolution was duly seconded and CARRIED 2050 votes in favour, 15 against and 42 abstentions. 3/56 '''CHAIRMAN'S STATEMENT The Chairman said that the last year stood out as one where significant steps forward had been made across the organisation and in everything that Which? set out to do. The continuing growth and success of the business operations meant that more than ever had been invested in campaigning on behalf of all UK consumers. Charitable expenditure had increased to £10m, a six '''l fold increase over the last 10 years. That investment had been used to bring about a step change in activity, launching new high-profile campaigns and investing in the people and technology to make those campaigns a success. A recent example was the 'Fixed means Fixed' campaign, where Ofcom had ruled that fixed really did have to mean fixed on mobile phone contracts, otherwise consumers had the right to walk away without penalty. In the same area, and following questions at the 2012 AGM, regulators had been given 12 weeks to take action on launching a 'calling time on nuisance calls' campaign. A government plan on how this issue would be dealt with was expected shortly. There had been some tangible success with traffic light nutrition labeling. Following a long battle to get nutritional information made mandatory, Tesco had announced that it would adopt a traffic light system. Since then, all major food retailers and a number of manufacturers had come on board. Total subscriptions had reached 1.4m, showing that Which? was continuing to offer products and services that were relevant to a large audience. A big part of our effort to stay relevant in our policy and campaigning work, as well as commercially, was the investment in consumer insight. We now had over a year's worth of data tracking consumer sentiment month-by-month across a range of issues such as the cost of living and long- term financial security. The consumer insight tracker had shown that energy prices were consistently a top worry for consumers, with energy becoming the least trusted sector. A new energy campaign had been launched calling on the Chancellor to cut the Big Six energy bills down to size. 30,000 supporters had been signed up and work was taking place to influence the Chancellor's Autumn Statement. As well as reiterating the call for the separation of the retail and generation business of these vertically integrated companies, Which? had called for a number of changes to energy efficiency policies which should ensure they were more cost-effective and better targeted. Pensions were another important consumer concern. Work over the year had led to consultancy charges for auto-enrolment being banned by the Department of Work and Pensions. Which? was also putting pressure on the government not only to introduce a cap on the annual management fees, but also for it to be lowered from the proposed 0.75% to 0.5% and for this to be extended to all workplace pension schemes. This seemingly small change could make a big difference to individual pension pots. 2''' Other successes had ranged from stopping companies from charging premium rate numbers, to following up to ensure they complied with the changes to the law as part of the surcharges campaign. Finally, and in response to discussion at the 2012 AGM on how to ensure a highly skilled and diverse Council, the decision had been taken, both when seeking candidates and presenting them to the electorate, to make it clearer which particular skills and expertise were required. This had been coupled with an explicit statement that we would especially welcome applications from women, ethnic minorities, younger people and those with a disability, as well as those living outside the south east of England. The impact of these initiatives would be reviewed after the results of the 2013 elections were known. '''4/56 CHIEF EXECUTIVE'S STATEMENT The Chief Executive said that both revenue and subscriptions had increased for the seventh successive year and it was apparent that both content and magazines were reaching more people than ever before. Which? was now the number one selling monthly magazine and had achieved its highest level of subscriptions since 1995, firmly bucking the trend in the general decline of print titles. Both Which? Computing and Which? Money had extended their lead at the head of their categories and the number of members accessing Which? Online had grown by 42% over the year. Digital development had accelerated to support that ambition with new iPhone and iPad applications as well as a redesign of the Which? homepage and site navigation going live. To keep Which? at the forefront of providing up to the minute research on products, the first of the full market coverage reviews had been launched in order to create the ultimate choosing experience. Starting with televisions, the aim was to revolutionize Uvo w*y reviews were dcVrveiea and to move this model across the Board, thereby helping members get more from their subscriptions. As well as growing the core business, the Chief Executive said that Which? was expanding into a number of new areas where the market was not working as well as it should. Commercially viable propositions would be developed according to Which? values and in doing so change the market in favour of consumers. These businesses needed to be commercially viable in order to support wider work while at the same time showing that treating customers fairly was not 3''' unprofitable. So, for example, investment on Which? Mortgage Advisers had been accelerated. This business had gone from strength to strength over the last year, giving Which? members and consumers clear, independent and impartial advice. The number of advisers had tripled and between them they had arranged over 2000 mortgages - a number that was expected to triple in 2014 helped by the fact that 97% of those who had been helped would recommend the service to others. An annuity service was being piloted as this was an area where advice was often poor or biased and where there was a real opportunity for Which? Another example of creating positive change for consumers was Which? Trusted Traders which had arisen from the successful Which? Local initiative. This service would help people to make an informed choice about finding the best traders in their local areas as well as helping endorsed firms to stand apart from the competition. If the pilot was successful, then the intention was to roll the service out nationwide. It was hoped to extend the Which? Legal Wills Service to Scotland by the end of the year. Right Choice, the consumer magazine in India, had grown significantly during the year with an increase from 3,000 to 24,000 subscriptions. By the end of the current financial year, the plan was for each subscriber to be profitable, building the business foundations for what in time could be as large a commercial operation as fueled Which? in the UK. The commitment to supporting consumers in a range of innovative ways remained at keeping the business ahead of the game and ensuring that Which? remained true to the aim. All this growth allowed reinvestment in the mission plus supporting the campaigns and providing free advice to consumers. The Chief Executive outlined three examples in particular. The first was the launch of the 'Big Change in Banking' back in September 2012 to try and bring about a fundamental shift in banking culture. One of the recommendations arising from the Parliamentary Commission on Banking Standards was the creation of a new independent professional standards body for the banking industry - a process that would be led by Sir Richard Lambert. Mr Vicary-Smith said that he had been invited to be a member of the working group that would be charged with shaping the new body which would deliver its recommendations in the spring of 2014. '''4 Second, Which? University had been launched in September 2012 against a backdrop of increasing tuition fees, as a free-to-use website that helped students make important choices about higher education. The site had proved to be extremely popular with over I million visits in the first 10 months, and placed Which? in the top five University comparison sites. Finally, a new Consumer Rights website had been launched to give free expert advice to people faced with everyday consumer problems. The site had surpassed 200,000 monthly visits with more than 1.3 million people visiting the site since February. Increasingly the decisions that affect consumers were made in Brussels and the Chief Executive said that at the end of 2012 he had been elected President of BEUC. This had allowed involvement in the proposed Consumer European Sales Law, the reforms to the European Banking System and currently negotiations with the United States over a trade deal. The next year would be approached with a new sense of ambition. Much had been achieved, but there was a real opportunity to do much more. 5/56 REPORT OF THE COUNCIL OF TRUSTEES AND ACCOUNTS FOR THE YEAR ENDING 30 JUNE 2013 The Chairman proposed: THAT the Annual Report and Accounts for the year ending 30 June 2013 be received. Mr Ghosh noted the losses for Right Choice for 2012/13 (£2.3m) and Which? Financial Services (£1.5m) and asked about the accumulated loss for India. India was a complex country with each region having its own characteristics. Was there a fixed sum at which point no further money would be spent. Mr Cadranel (Group Finance Director) said that £9m of losses had been incurred on the India project to date and it was anticipated that a breakeven point would be achieved in the next three years. The prize in India was significant and could lead to profits of £7m to £8m per year using modest assumptions. The last financial year had seen a 10 fold increase in subscriptions and mechanisms had been found that would allow the business to achieve a position where each new subscriber was profitable. Progress of the Business was monitored closely by the Board of Which? International Ltd. 5''' The Which? Mortgage business could have broken even in the current year, but the decision had been taken to invest and build the business more quickly. There were now around 49 mortgage advisers at the office in Bristol with plans for a subsidiary office in London. The recent increase in mortgage activity was encouraging and the view was that by the end of the current financial year, the business would be in a strong position delivering a service lacking in the market place. Mr Marsden asked whether management was concerned about progress of this subsidiary given the plan to increase Right Choice subscribers to 350,000 in four years. Mr Gardner (Managing Director of Which? Publishing) said that the acquisition of new customers needed to be accelerated and that the plan was to move to 53,000 subscribers in the current year and 120,000 the following year. These numbers looked achievable and the business was very focused on the scale and that was necessary for profitability. Mr Vicary-Smith said that in his view, there were four stages. First, it was necessary to have a product that could be produced routinely that delivered for consumers. That had been achieved early on. Second, marketing techniques were needed where recruitment could be undertaken profitably. That had been a more difficult task, but it had now been achieved. Third, it was necessary to demonstrate that the business could be scaled up, and that was the target for 2013/14. Finally it was necessary to accelerate as soon as possible to get to a position of profitability. Mr Miller asked for more information about the subsidiary holding Company Yellowfin Holdings, based in Mauritius. The Chief Executive said that the Indian government wished to encourage inward investment and that the prime route for doing this was via holding companies based in Mauritius which had an arrangement with the Indian government. Which? would continue to monitor the status of Yellowfin Holdings and if the Indian Governmert changed its position, then Which? would make other arrangements very quickly. Mr Lewis asked whether the requirement that each member of Consumers' Association guarantee the sum of 50 pence in the event of liquidation could be abolished. In reply Mr Cadranel said that there was no risk that the 50p would ever be collected from members and that Secretary advised that as Consumers' Association was a Company Limited by Guarantee. The 50 pence guarantee was a requirement of the Companies Act and could not be removed. 6 Mr Taylor said he was concerned about the level of remuneration shown for senior executives and the Long Term Incentive Plan for four individuals which he estimated could potentially pay out a total of c£3m if targets were met. Mr Taylor said that he also had concerns about the testing regime for washing machines; the fact that the LED lighting report contained no mention that LEDs could interfere with radios, and that some e-readers were particularly suitable for people with poor eyesight. Mr Preston said that the Council had appointed a Terms of Service Committee which obtained external advice on remuneration and benchmarked companies that were the same size and structure as Which? It was necessary to ensure Which? attracted and retained the calibre of people necessary for a successful business. Although Consumers' Association was a charity, the commercial operation was key to its long-term survival and success. The LTIP would pay out only if the business achieved transformational progress based on an independent valuation. The Committee had set a target of a ''22%'' increase in the overall value of the business over three years and capped it at 33%. The target (below which there would be no LTIP payout) was very tough. If it was achieved, Which? would be a much stronger and more sustainable organisation. Nikki Stopford (Head of Research) said a fundamental principle of all Which? testing was that it was of high quality with comparable results, so that consumers could be confident they were being offered the best products. Ms Stopford said she would look at the point on LED lighting and would pick up on the detail of e-readers. Mr Godliman asked why it was only now that the LTIP was being flagged with the membership and asked about the signal this sent. The Chairman said that the disclosure in the Annual Report and Accounts went well beyond the obligation to disclose in order to be transparent. This was the first full year of the Scheme and therefore was not disclosed earlier. Because of the volume of business still to be dealt with, it was necessary put the matter to a vote. The Resolution was duly seconded and CARRIED 2045 votes in favour, 24 against and 46 abstentions. '''7 6/56 APPOINTMENT, NOMINATION AND RETIREMENT OF MEMBERS OF THE COUNCIL OF TRUSTEES The Chairman said that there were three vacancies on the Council of Trustees arising from the retirements of Sue Leggate, Natalie Macdonald, Jennifer Oscroft and Brian Yates. The Chairman thanked Sue, who was retiring after 15 years, Natalie, who was retiring after 9 years and Brian who was retiring after 25 years. Ten valid nominations had been received for these vacancies namely John Bevan, Jo Coburn, Donald Grant, Anthony Havlin, Haidi Jenkin, Jennifer Oscroft, Julian Porter, Patrick Taylor, Charles Wander and Chris Willett. In accordance with Article 10.27, the Chairman called for a poll and instructed the Secretary to arrange for the dispatch of ballot papers to all Ordinary Members together with all Associate Members who had been paid-up for one year. Ballot papers to be returned to the Independent Scrutineers, Electoral Reform Services, by Friday 10 January 2014. The results would be notified as soon as possible thereafter and would be deemed to be the resolution of the AGM* The Chairman said that most members would have the choice of voting by post, telephone or internet. (*The results of the 2013 Council elections are given below) 7/56 RE-APPOINTMENT OF SIR PHILIP GOODHART AS A VICE-PRESIDENT The Chairman said that Sir Philip Goodhart's current five-year term as a vice-president came to an end at the AGM and that Council had recommended he be re-appointed for a further term. Sir Philip Goodhart had been a Council member from 1959 to 1968 and a vice-president since 1983. The Chairman proposed: THAT in accordance with Article 13.7, Sir Philip Goodhart be and is hereby re-appointed as a vice-president of the Association. The Resolution was duly seconded and CARRIED 1959 votes in favour 77 against and 80 abstentions 8/56 RE-APPOINTMENT OF RAY GOODMAN AS A VICE-PRESIDENT The Chairman said that Ray Goodman's current five-year term as a vice-president came to an end at the AGM and that Council had recommended he be re-appointed for a further term. Ray Goodman 8''' had been one of the original Founders of Which? and was a Council member from 1957 to 1958 and a vice-president since 1958. The Chairman proposed: THAT in accordance with Article 13.7, Ray Goodman be and is hereby re-appointed as a vice-president of the Association. The Resolution was duly seconded and CARRIED 1933 votes in favour 91 against and 92 abstentions '''9/56 RE-APPOINTMENT OF DOROTHY GOODMAN AS A VICE-PRESIDENT The Chairman said that Dorothy Goodman's current five-year term as a vice-president came to an end at the AGM and that Council had recommended she be re-appointed for a further term. Dorothy Goodman had been a Council member from 1957 to 1958 and a vice-president since 1958. The Chairman proposed: THAT in accordance with Article 13.7, Dorothy Goodman be and is hereby re-appointed as a vice-president of the Association. The Resolution was duly seconded and CARRIED 1936 votes in favour 87 against and 93 abstentions 10/56 '''RE-APPOINTMENT OF JOHN RIMINGTON AS A VICE-PRESIDENT The Chairman said that John Rimington's current five-year term as a vice-president came to an end at the AGM and that Council had recommended he be re-appointed for a further term. John Rimington had been a Council member from 1994 to 2008 and a deputy chairman for seven years. The Chairman proposed: THAT in accordance with Article 13.7, John Rimington be and is hereby re-appointed as a vice-president of the Association. The Resolution was duly seconded and CARRIED 1959 votes in favour 68 against and 89 abstentions '''11/56 RE-APPOINTMENT OF AUDITORS The Chairman proposed: THAT PricewaterhouseCoopers LLP be re-appointed as auditors to hold office until the conclusion of the next Annual General Meeting at which accounts are laid before the company. 9''' The Chairman thanked Phil Stokes (Audit Partner), for his professional advice during the year. Mr Grant referred to the audit tender process that had taken place during the year and asked whether any smaller firms had been invited to tender for the Which? audit. Mr Castro (Chairman of the Group Audit Committee) said that there had been four firms on the shortlist, including the previous incumbents, together with one smaller firm. Mr Cherney was advised that PricewaterhouseCoopers had been appointed in March 2013. The Resolution was duly seconded and CARRIED, 1915 votes in favour 144 against and 56 abstentions. REMUNERATION OF THE AUDITORS The Chairman proposed: THAT the remuneration of the Auditors for the ensuing year be fixed by the Council of Trustees. Mr Marsden asked whether it was possible to get female representation on the Group Audit Committee. Mr Castro said that one member of the Committee was female and Ms Oscroft said that there were currently six female members of Council. Rather than appointing female Ordinary members on the Committee, it would be better to encourage more female members to put themselves forward for election to Council. Mr Cherney asked for and was given clarification on the audit tender process. Mr Ghosh asked about the total audit fees and noted that PWC had charged approximately £8,000 less for audit fees, but that fees for other services had increased leading to an increase overall. Mr Cadranel explained how the fees were broken down said that the overall fee had increased because of the growing complexity of the group. The Resolution was duly seconded and CARRIED 2015 votes in favour, 51 votes against and 49 abstentions. '''There being no other business, the meeting ended at 1.25pm The Chairman said that he would now devote time to questions from the floor. These questions, together with the responses, are attached to the minutes. ♦Election of members of the Council 2013 The results of the 2013 elections which closed on Friday 10 January 2014 are as follows: 3 vacancies Jennifer Oscroft 15,433 ELECTED Jo Coburn 14,409 ELECTED Chris Willett 13,951 ELECTED Donald Grant 10,598 Haidi Jenkin 8,479 Charles Wander 7,240 Julian Porter 5,861 Anthony Havlin 4,930 Patrick Taylor 3,028 John Bevan 2,923 11 Question and answers dealt with following the conclusion of the Annual General Meeting Mr Kitchen asked why more and more of the testing in the magazine was restricted with the full tests not being available. Sound was very important in TV tests and not enough attention was given to this aspect. The Which? Will service was not represented at the meeting although he had been given an undertaking that this would be rectified for the 2014 AGM Mr Gardner said that with the expansion in the number of tests, it had been necessary for more of the information to be available online. However, staff worked hard to ensure that those who received only the magazine obtained as much information as possible. On weightings, an increasing number of people used TVs with other sound systems and so it was necessary to respect the way people use those products. Thinner TVs meant that it was harder to maintain sound quality. Ms Stopford said weightings were a key area and a great deal of work went into covering what was important to consumers in terms of testing. Mr Thomas asked, on traffic light labeling, whether there was a specific percentage from green to yellow and from yellow to red and did it vary between products e.g. was salt different from sugar. Helen Parker (Director of Policy) said that it reflected the food type and was comparative within food types. However she was happy to discuss further outside of the meeting. Mr Anderson congratulated the editorial team of Computing Which?. However, he had requested free guides on a couple of occasions, but these had not arrived. Mr Gardner said he apologized for this problem as the guides were an important way of maintaining relationships with customers, and that he would investigate the instances. Mr Lewis asked (a) how Which? would replace the services of Citizen Advice Bureaus (CABs) that closed; (b) how the manufacturers of own-brand products could be identified in the magazines; © if it was possible to report on low-cost brands in the magazines; (d) whether it was possible to list the titles of free guides in the magazines; (e) whether there was a charge for Which? recommendations ;(f) if Which? could campaign against prices charged for hospital car parks;(g) why the product number of products in shops was not always consistent; and finally, whether there could be a campaign for supermarkets to stock more sugar-free products. The CEO said that in respect of the problem with CABs closing, Which? had taken on international representation work that CABs used to pay for via BEUC the European 12 Consumer Organisation. On point (b), there was often more than one manufacturer for own brands and the difficulty was identifying the actual manufacturer. On ©, value brands had been looked at it but the difficulty was that they came into a store in batches but then never appear again. While Which? had asked to be kept informed about early batches, this was logistically difficult. On (e) Which? didn't charge for awards but did charge a small fee for the recommended supplier and best buy logos. On (f), car park charges, some work had been undertaken on hospital car park charges in the last couple of years and on (g), model numbers, efforts were being made to get links to read across the test results. The issues of the booklets and sugar free foods would be reflected upon. The Chairman concluded the discussion at this point and thanked members for their contributions. Members of Council and senior staff would be able to answer further questions over lunch. The meeting ended at 1.50pm. 13